While reverse mortgage originators are likely to agree that they need to give potential borrowers all the information they need in order to make an informed decision, talking too much about reverse mortgage product features and details could actually work far more against a loan officer’s efforts.
This was the main argument made by Craig Barnes, education leader at Reverse Mortgage Funding (RMF), at a presentation made during the National Reverse Mortgage Lenders Association (NRMLA) Western Regional Meeting in Huntington Beach, Calif.
“I spoke with a trainer at RMF, and he found out that the more the loan officer speaks, the less the loans turn into sales,” Barnes said. “We did some investigation and anecdotal information gathering, and I found a survey that backed up everything we thought.”
The survey is called “The Science of Winning Sales Conversations,” and it was conducted and published by Gong Research Labs in April 2017. Hundreds of thousands of sales call recordings were fed through the firm’s self-learning conversation analytics engine, and yielded the patterns of successful sales performers on their sales calls across several different industries.
Barnes identified an opportunity to use much of the key information Gong gleaned in its survey and apply its lessons more specifically to the reverse mortgage business.
The pitfalls of talking too much
One of the problems that some reverse mortgage loan officers run into is overloading their potential borrower with too much information at too quick a pace. This can lead to a number of difficulties that limit the ability to make a sales connection. Among these are that it limits the opportunity for a borrower to ask questions, and the LO losing the opportunity to clarify and confirm they have their client’s understanding. Clients can also feel pressured, and end up taking no action as a result. The dialogue needs to be a back and forth.
“If you’re talking, the client isn’t,” Barnes said.
The likelihood of leaning on concepts and acronyms that a loan officer knows well can also get originators caught in “word salad,” especially when repeating relevant acronyms and entities in quick succession: FHA, HUD, LESA, Maturity events, etc.
“These are things we all know, but if you blow through them then the likelihood is that the client will get lost,” Barnes says. “Make sure if it’s something you’re talking about often, tell people what a repeated acronym or factor is first. Don’t get trapped or use them too much, but if you do use them, make sure you’ve already, and repeatedly, defined it.”
Keep responses simple
Because prospective borrowers are interested primarily in less complicated access to loan proceeds, getting bogged down too much in the details could inflate a loan officer’s answers to questions and impose a barrier to that potential client’s understanding. One of the ways to get around this is to more narrowly tailor your answers to the client’s own needs, Barnes says.
For example, if a client asks a loan officer “How can I get my money?” then a good way to more carefully tailor the information could be by asking a follow-up question: “How would you like your money?” That potential client’s response can then more narrowly point the loan officer to the options that more closely fit in with the desired way they can receive their loan proceeds.
Ending on a question so that a borrower engages more with the loan officer can also help the prospect feel more involved in both the process and the conversation, Barnes advises. For instance, if a prospective borrower asks about what complications arise from having a pre-existing forward mortgage, the loan officer can keep it simple and turn the conversation back toward the borrower.
“We pay off any of your existing mortgage switch proceeds from the loan,” the LO can say. Then follow up by asking, “How much do you owe on the house?” This way, the borrower remains engaged in the conversation, and the loan officer can get more information simultaneously.
Talking versus listening
The Gong research netted some findings that can apply to a wide variety of sales situations, including reverse mortgage transactions. One of the findings revealed that the client should be talking roughly 57% of the time to the LO’s 43%, emphasizing that LOs should not monopolize the conversations with potential borrowers.
“In the average sales call, the salesperson speaks 75 percent of the time,” Barnes said.
The company overview should also remain relatively short, because of the likelihood that too much emphasis on the company could maneuver the conversation away from the borrower’s needs.
“Too much company information can backfire,” Barnes said. ”It can sound egotistical, talking negatively about competitors often makes you look bad, and it could drive the client to research or reach out to competition.”
Be aware of any interactions clients had with a loan officer’s competition, and also be aware of the rates associated with competitors since clients generally respond positively to honesty. A loan officer should also offer to talk to the client’s most trusted advisors, including finance professionals, friends and family, Barnes advises.
Responses to the presentation
Originators are largely receptive to the tips that the presentation offers to loan officers, Barnes said. That reception was clear both at the NRMLA Western Meeting and when he’s given similar presentations online as a webinar.
“It’s been very positive at the conference, and we’ve been doing the webinar [version] on our regular quarterly partner calendar since the fourth quarter of last year,” Barnes told RMD in a phone interview. “People like it and get a lot of it. What we try to do is ask audiences online or on-site to do some participation. We like to learn what loan officers do when confronted with some of these borrower questions, and how they change the conversation. We try to get them a little more engaged.”
The bottom line is that allowing clients to have a more active role in charting the direction of their conversations with loan officers could help lead to more solid sales connections.
“The whole idea of it is that, really, you’re more likely to get the loan if you let the borrower tell the story,” he said. “Let them almost convince themselves that this is the right move for them.”